A few months ago, Plug Power [Nasdaq: PLUG] was forced to revise several of its previously published financial statements. While the accounting errors were not severe enough to have a material impact on the statements, they resulted in a USD 62.9 million decrease in R&D costs in the years 2018 to 2020 and a corresponding rise in cost revenue. Furthermore, non-cash charges, including charges associated with warrants Plug granted to Amazon and Walmart, exceeded USD 400 million. That’s pretty notable. Do these charges have anything to do with Plug’s relatively high amount of short interest, which comes to over 50 million shares? Could Amazon and Walmart have exercised warrants? Or have they now shorted stock to shore up their unrealized gains running into the billions of dollars?
Plug Power stock is resilient. On the plus side, Plug [Nasdaq: PLUG] completed its USD 123 million acquisition of Giner ELX and United. It will allow the company to not only produce hydrogen but also start making electrolyzers. As I often noted, this kind of deal would be needed for an upward trend in Plug’s price. Moreover, the fuel cell supplier announced that it had received several sizeable orders, including a recent one from a new UK customer, Asda, a Walmart subsidiary.
In my view, Plug Power [Nasdaq: PLUG] is definitely on the right track: Building and expanding liquid hydrogen production facilities while planning to acquire United Hydrogen. The latter’s 6.5-ton annual capacity should be raised to 10 tons, thus meeting 25 percent of Plug’s in-house demand, meaning eventually the profit margin can come from consumables. Plug is also negotiating with an electrolyzer manufacturer that could or should be absorbed. That all looks very good to me. In a few years’ time, Plug intends to cover more than 50 percent of its own production with green hydrogen.
Since the beginning of the year, the fuel cell stocks covered in this issue had seen a fast uptrend, which ended with the spread of Covid-19 around the world. Fears over the impact of the disease on the global economy meant some gains were quickly lost. Still, in light of increased news coverage, multiple project announcements and the growing popularity of green hydrogen, it has become clear that hydrogen and fuel cells are entering the mainstream and their breakthrough into the market is approaching rapidly.
Cashing in around the USD 5 mark, as I recommended, may have been a bit premature, seeing that the price rose as high as USD 6, but was ultimately a prudent move. At present, Plug Power’s stock again trades around USD 3. You may wonder what happened in the meantime. Simply put, expectations were too high. The net loss per share amounted to USD 0.06 in the fourth quarter of 2019. Revenue rose to USD 91.7 million, compared to USD 59.8 million generated in the prior-year quarter, which means there is some good news.
Full-bodied it comes from the company Plug Power: In 2024, the company aims to exceed the US$ 1 billion sales hurdle and generate pre-tax profit of US$ 170 million. But there’s still a long way to go. First of all, it was possible to increase the billings (new bookings) by a good US$ 61 million in the third quarter and the annual turnover is expected to be between US$ 235 and 245 million.
The momentum for the fuel cell is constantly improving with increasing dynamics. Recent co-operations such as those between Bosch and PowerCell, but also positive statements on fuel cells from automobile manufacturers such as Audi are attracting attention. Will China be the driver again, as it was when the batteries were introduced and before that in the field of renewable energies? There, new funding guidelines are about to be introduced, which are intended to favour and strongly promote the fuel cell and the hydrogen infrastructure, while the subsidies for purely battery-operated vehicles will, depending on the radius, be abolished in full or to a large extent.
Since 2008, South Korea has aggressively pushed the development of the fuel cell markets for stationary and mobile use. The driving factor behind the government’s decision was the global economic crisis, which led to an equally painful economic downturn in Asia. In the country officially called the Republic of Korea, it awakened dark memories
If the number of order bookings is anything to go by, then Plug Power is not only doing very well, but the company will be able to easily achieve or even exceed its ambitious goals: New orders worth USD 72 million in the first quarter increased backlog to an impressive USD 278 million. The new booking target figure this year is USD 275 million. The revenue target is USD 150 million – after USD 100 million last year.
November 2015 saw the publication of the Fuel Cell Industry Review 2015, including market data and analyses for 2015. Since 2014, a team led by E4tech had contacted fuel cell companies around the globe, aggregated their supply figures and can now show the latest trends in the industry, much as Fuel Cell Today had done before its survey came to a halt. The following will present some excerpts from the review.